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Developing Country Productivity
Part 3 of 3

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Learn the Lessons

There are several lessons that United States industry can learn from these developing country installations. The lessons occur when questions are raised during these installations that force us to rethink our methodologies. A few of these lessons are:

a. The critical decision making resource is rarely the labor resource.

b. Developing countries are innovative and fast learners. In a recent study where workers from several countries were asked to learn a new procedure, a measurement was made of how long the average worker took to learn the procedure and accomplish it consistently within a certain period of time. The average learning curve for the United States worker was about six hours. The average for the Japanese worker was about five hours. The average for the Mexican employee was about 4.5 hours. It's not that the Mexican's are somehow smarter. However, it seems that the developing country worker is more receptive to change, is more willing to learn, and is not as set in their ways. Learning a new procedure is treated as a way of live, not an incumbrance to it. This open mindedness toward change is why companies like Intel are setting up major research centers in cities like Penang.

c. We need to avoid being secretive in our business. We need to share our goals with our employees. They can't achieve a goal that they don't know exists. I have visited numerous US companies where the employees are not allowed to see the Business Plan. A Business Plan of this type is as valuable as having no plan at all.

d. Move from Copy Catting to Innovating technology.
e. Implement integration instead of Faddism. Programs like JIT, SPC, or TQM are not fads that come and go. They are stepping stones to success. These "fads" have long implementation lead times. We need to stop jumping from one to another. Rather, we need to build on the first with the second, and then the third, and so on.

f. Understanding is more important than writing. Our legalistic society places more precedence on the fine print, than on the mutual understanding. The result is a NAFTA agreement involving 3 countries that is 2,200 pages long, while the South East Asia APEC trade agreement involving 6 countries is 16 pages long. Compromise is more important than winning. For example, there is a piece of land that is under dispute between Malaysia and Thailand. As luck would have it, this piece of land turned out to be oil rich. The Western solution would be to punch it out over this piece of land. The Asian solution was to set up a separate business entity that was responsible for the development of this region, and then both countries would share in the profits.

g. The long term perspective is more valuable than the short term profits. Much of our short sightedness is the result of a lack of trust. We have developed elaborate nontrust systems that cost us more than the mistakes they were designed to protect us against. This lack of trust is forcing us to make decisions that are very damaging on the long term basis. For ex­ample, the enormous middle management flush that has been the fad over the last couple years is turning red Profit and Loss statements into black. However, I have to wonder if the talent that has been thrown away is not the same talent that would have been instrumen­tal to the future success of the organization.

h. Teaming is at the root of all success. Teaming is the development of a synergistic and effective group of people. An effective team looks for value-added ben­efits for the team, and the organization as a whole. What we do in the United States is grouping, which is throwing a group of people together in a room and expecting them to comfortably share ideas with each other. Grouping does not have the effective long-term synergistic effect that teaming has.

i. Invite and welcome continual change. Implement change models that will foster continuous change, like TQM.

j. Eliminate the resource waste. Focus on total factor or value added productivity.

Consider the Cultures

Most developing countries are more influenced by religious culture than by profit. They are more motivated by helping society or the family, than by helping the individual. An employer makes a positive impression on your work force by helping the worker's children, not by giving the em­ployee awards or money. The ethical system in many cultures is societal, not individual. Many things that we consider unethical (or unfair as my children would say) are very ethical in a culture that works for the benefit of the whole. In many of these cultures the relationship that grows out of a business transaction is much more impor­tant than the profit made in the business transaction. I find it ironic that Ferengi Beach is located in Penang, while the Ferengi type business ethic (there has to be a profit in every transaction) is found in the United States (you have to be a fan of Star Trek: The Next Generation to understand what the Ferengi are).
Most developing countries consider cooperation and com­promise as essential ingredients in doing business. This also involves the management to employee relationships in a more cooperative arrangement, including more compa­rable wages than is typical in the United States.

These are only a few of the cultural considerations that need to be addressed. Each country has productivity affecting cultural considerations of its own that go far beyond the ones already mentioned.


Developing country installations challenge many of our basic beliefs on productivity. These beliefs include the methods of measuring productivity, the resources used to define productivity, the measurement and motivation sys­tems used to promote productivity, and the cultural and ethical basis behind the motivation systems. There are many lessons that we can learn from these challenging developing country installations. Hopefully, we can use some of these lessons to improve our own productivity here in the United States.

For balance of this article, click on the below link:

Lean Manufacturing Articles and go to Series 01


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